Understanding how to navigate digital assets
Recent Developments
In December 2025, the Property (Digital Assets etc) Act 2025 was introduced, confirming digital assets as protectable property.
Digital assets are now fundamental to modern society consisting as valuable things themselves, as a means of payment, or to represent or be linked to other things or rights.
The term digital assets is extremely broad, capturing a wide variety of things including, but not limited to, digital files, digital records, email accounts, domain names, digital carbon credits, crypto-tokens and bitcoin.
Previous Problems
Personal property rights are vital to social, economic and legal systems. English Law has traditionally divided property into two exhaustive categories; choses in possession and choses in action.
Chose in possession refers to a tangible item over which the owner has actual physical control and enjoyment. Examples include cash, a car, a painting, or physical securities. The owner can immediately use or transfer the asset as possession itself confers the right to enjoy it.
Chose in action is an intangible legal right that cannot be enjoyed physically but can be enforced through a lawsuit or legal claim. It represents a right to recover something, such as money owed, damages for breach of contract, or rights under a will.
Previously, the law has proven itself resilient to recognise certain digital assets as things to which personal property rights can relate. Property is known to have certain characteristics, it is a thing that can be defined, identified, transferred between people, it tends to have a degree of permanence. Crucially, it has an attribute of rivalry, if one person is using or consuming it, someone else can’t use or consume it at the same time. As both the digital asset market and the technology continues to evolve, digital assets no longer fit neatly into the previous categorisations, they have an independent existence in a virtual world.
Digital Assets Act 2025
In December 2025, the Property (Digital Assets etc) Act 2025 became law, making England and Wales, and Northern Ireland, among the first countries in the world to confirm in law that digital assets consist of personal property. The Act has closed an important gap in property law by confirming that certain items are not excluded from attracting property rights simply because they do not fit within the two traditional categories of personal property. The Act leaves it to the courts to develop this ‘third category’ of personal property by delineating its boundaries and the rights that attach to ‘third category’ things.
The Act does not itself introduce a new category of property, neither does it define which digital assets automatically qualify as property. Instead, it preserves the existing framework by allowing courts to apply established common law tests when determining whether an asset attracts property rights.
This approach provides considerable flexibility, ensuring that the law can adapt and evolve in step with technological innovation without imposing rigid definitions that could quickly become outdated. Whilst the Act is exceptionally short, comprising of only 2 clauses, it has wide-ranging effects. It provides legal certainty for digital assets, as they can now attract property rights even if they do not fit neatly into traditional categories. It will also reduce the number of disputes by clarifying the position of digital assets and eliminating arguments over whether such assets qualify as property.
However, it must be noted that, challenges remain for office-holders: price volatility makes valuation tricky; identifying and securing assets can be difficult; and because digital assets are borderless, they can be moved across jurisdictions quickly, potentially putting them beyond the reach of local enforcement orders.
How we can help
Let us help you to protect your digital assets.
For further information, please contact our Wills, Trusts and Probate team on 01733 882800 or [email protected].
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